Anlon Healthcare IPO subscribed 1.7x on Day 1, retail portion booked 9x; should you subscribe?

Anlon Healthcare IPO Day 1

The Rs 121-crore maiden public issue of Anlon Healthcare opened for public bidding on August 26. The mainboard IPO was subscribed nearly 1.7 times its offer size on Day 1.

The initial public offering of the Rajkot-based company received bids for more than 2.24 crore shares, as against the offer size of 1.33 crore shares, according to data on NSE. Retail investors have shown the most interest so far, booking their reserved portion nearly 9 times. Non-Institutional Investors (NII) subscribed 71 percent of the portion kept for them. Qualified Institutional Buyers (QIBs) booked 91 percent of their reserved portion.

Anlon Healthcare IPO GMP:

Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of nearly 5.5 percent over the IPO price at Rs 96 apiece, according to data on Investorgain.

According to IPO Watch, the unlisted shares of the company were trading with around 7 percent GMP over the IPO price.

Key things to know about Anlon Healthcare IPO:

Anlon Healthcare, that produces pharmaceutical intermediates and active pharmaceutical ingredients (APIs), moved to the capital markets to raise over Rs 121 crore through a fresh issue of 1.33 crore shares at a price band of Rs 86-91 per share.

Investors can bid for a minimum of 164 shares, requiring an investment of Rs 14,924 at the upper price band, and in multiples thereafter. The allotments will likely be finalized by September 1, and the shares are scheduled to debut on BSE and NSE on September 3.

Proceeds from the issue will be deployed towards expansion of the company's manufacturing facility (Rs 30.7 crore), funding working capital (Rs 43.15 crore), repayment of debt, and general corporate purposes.

Should you apply for Anlon Healthcare IPO?

Anand Rathi advised investors to subscribe to the issue for the long term. “At the upper price band company is valuing at P/E of 19.0x to its FY25 earnings, with EV/EBITDA of 16.7x and market cap of Rs 4,836 million post issue of equity shares. We believe that the IPO is fully priced,” the brokerage said.

Shivani Nyati, Head of Wealth at Swastika Investmart, however advised investors to avoid the issue. “The company focuses on manufacturing and marketing specialized APIs in line with global standards. It positions itself as the first producer of Loxoprofen and related formulations. In FY24, its revenue growth was impacted due to the registration process in Brazil. The company’s operations are highly dependent on a single facility located in Rajkot, Gujarat. Looking at the latest financials, valuation seems Fully priced. Hence, investors may consider avoiding this IPO,” the analyst said.

"Investors must weigh the modest scale of operations, lack of dividend history, and aggressive pricing against the strategic optionality of its custom synthesis segment and planned capex deployment. This is a company seeking capital not just for growth but for transformation," said Harshal Dasani Business Head, INVasset PMS.

"In a market increasingly favoring innovation-led, compliance-ready pharmaceutical firms, Anlon’s differentiated product slate could justify a re-rating over time. That said, given the valuation optics, the offering may suit only long-term participants with risk appetite and domain familiarity," he added.

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